jack wrote: "When you trade daily for 6 1/2 hours a key thing to consider is not doing too much to make some money." i just want to make a decent amount of money following a simple system. this meets both objectives. the next iterative refinement in this process (that i can see) is to do the following jack wrote: "I work first with 30 minute bars to frankly eliminate any sense of urgency. I use the prior days last bar to get the ball rolling, or I suggest you wait until the second begins to eliminate the end effects of the market." what i am witnessing regarding the first trade of the day (which would also be the first bar of the day)...is 'being out of sync'. hence if the system is out of sync, it is not on the 'right' side of the market. If the system is not on the right side of the market, then it is manifestly obvious to wait until it IS...hence to do as he suggests wait until the next bar.
Finally found it... Rarity, the following thread was in response to the latter supplemental and goes straight to the money making M.A.D.A/matter... http://www.elitetrader.com/vb/showthread.php?s=&postid=305175 Supplemental Stuff... http://www.elitetrader.com/vb/showthread.php?s=&threadid=20651&perpage=6&pagenumber=64 http://www.elitetrader.com/vb/showthread.php?s=&threadid=20651&perpage=6&pagenumber=69 http://www.elitetrader.com/vb/showthread.php?s=&threadid=20651&perpage=6&pagenumber=70 MAK!
PACE http://www.elitetrader.com/vb/showthread.php?s=&threadid=34558&perpage=6&pagenumber=16 I'll provide some specifics later today... MAK!
a BIG thank you mak, i've got my reading itinerary set. can't wait to transfer this stuff to what i was doing.
tomm... cont... So now that you have some perspective on pace, I will reference Chicken as an example. So Chicken came in and portrayed the failure bias that Chicken may have been experiencing. This is reading between his adamant lines. When failure has become routine, it reinforces the idea that success is extremely difficult because failure has become a routine and eventual modus. We are familiar with the stats so to speak (ie. 95% fail). Does this apply to ET? The long term average is 1 pt in ET. No doubt the 95% failures are skewing that average. SO then how can success be approached? Well, like most aspects of life, we have to do what's simple first, crawl->stand->walk->run. I threw stand in their because balance is required to walk. Being successful in the market can be achieved similarly. So did Chicken run without trying to crawl/stand/walk? Who knows? How can the market be related to such matters of progression??? The answer as is being found out has to deal with pace.... There is a reason why I pointed in the direction of Greenspans for Chicken as opposed to the whole day as Chicken is doing... But taking a step back, what is pace related to markets? Well, from the link, it is clear that paces vary and that different paces require different tools. At the simplest level, it is just easy to associate and recognize that pace is inversely related to risk. This means that in a fast pace there is little risk and vice versa. Without getting too technical, I regard pace much like the speedometer in my car. Whereas the speedometer reads as a change in distance over change in time (dX/dT), pace in the markets is similarly change in price distance over change in time (dP/dT). I liken the characteristics of pace to driving on a highway. Twice a week I drive from Long Island to Brooklyn and/or Manhattan. On bad days, there is alot of traffic and the pace is slow. Slow wrt pace means that I am covering a small distance over a fixed period of time and as a result, the 60 mile drive winds up taking 2.5 hours. When there is no traffic, the pace is fast (~70-75 mph, faster than that and the cops are on my arse). At a fast pace, I am covering more distance over the same standard period of time (60 mins since it is measured in MPH). So when comparing this simple aspect of a fast pace and a slow pace, we see that a fast pace covers a greater price distance per standard period of time then a slow pace does. Some characteristics of these differing paces...When the pace on the highway is slow, I frequently change lanes as means to increase my pace by continually selecting the fastest paced lane. When the highway pace is fast, I change lanes less frequently. Although there is no car instrument to measure this value, it is quantifiable as lane changes per standard period of distance (ie. mile). As a result, when trading slow paces, change is more frequent per standard distance period whereas in fast paces change is less frequent per the same standard distance period. This change frequency is the RISK component. What is different in the analogy between trading and the highway is tha by not changing when change is on the table, losses incur. It is where honing for effectiveness and efficiency begins. Hence the higher RISK... So what drives pace to be fast/slow/medium/extraordinary/none? Volume! It is pushing the traffic along. On low volume, traffic is being pushed along slowly. High volume and traffic is pushed along swiftly. Detailing this would require a lengthier post. So from the above simple pictures, it is recognizable as to how pace and risk relate. For Chicken, I mentioned that FOMC's is low risk. It is low risk because the asset's car so to speak (bid/ask pair) just traverse the price range speedily and in a prolonged direction. The price distance that is traversed within the FOMC period is relatively large (ie. high speed, dP/dT) and swift (ie few required lane changes/reverses). It is low risk because few changes (reverses) are required and as a result you just hold your lane. So you take your tools and get to see that they are quite effective in FOMC periods. With an FOMC, if you are on a 30M bar, you only get to look at 4 bars, why not look at more bars using the same tools??? What would be the result... Perhaps a more timely change... But then again, much of this post is going to be regarded as BS, another lengthy BS post. 95% vs 5%... What do the 5% do? What are the 95% not doing? Look at friday, how often did change appear. OFTEN??? MAK!
sorry i didn't get to do today's market, had other things to do. i did see it though, looks like friday, only the move was frontloaded rather than backloaded. i've briefly run over the pace material (very briefly) mak. ok let me see if i understand some things... high pace....low risk. low pace...high risk. so what you're saying is that volume drives future pace. volume sliding down below mid-level....future pace looking slow? not that the current volume is driving the current pace. (i don't even know if that made sense but i'll leave it in). so then it would be logical to simply trade the morning and afternoon where pace (for the 30 minute fractal?) is medium to high? I guess what i don't know yet is, how to stop the 'car' before entering low pace periods...and start it up again coming out of such periods. (here's just a quick drawing of my thoughts)
to answer your question directly, yes there was a lot of change on friday changing lanes but not getting anywhere. my head is spinning.
as an aside, the situations that i see this method losing money (let me rephrase that) the situations that i see this method (as i currently am employing it) losing money are in the slow pace periods like we had today and friday....and when price megaphones....larger and larger that also appeared to happen today. the start of days are appear to be rough in general